Plus Size Retirement Payouts Continue at American Cancer Society
Executives at the American Cancer Society (ACS) certainly have not been strangers to CharityWatch’s list of Top 25 Compensation Packages and have come under fire before for eye-popping pay. So it’s not surprising to CharityWatch that four of the six ACS executives that retired in 2013 received total compensation packages high enough to qualify on our Top 25 list as of February 2015. At number four on the list is the retiring Donald Gudaitis, former Executive VP of the New England Division, who was the highest paid ACS executive in 2013 with approximately $1.9 million in total compensation. The total compensation packages for all six of the retiring ACS executives in 2013 is over $7.1 million (including the value of base compensation, supplemental employee retirement benefits, severance, deferred qualified retirement benefits, and non-taxable benefits), for an average of nearly $1.2 million per executive, according to the ACS 2013 tax filing.
Prior to the 2013 retirements, ACS underwent a structural reorganization that included merging all of its 12 chartered geographic Divisions and the National Home Office into one single nonprofit organization, effective September 1, 2012. ACS described the mergers as “signaling the beginning of a new phase of transformation” and “no doubt one of the largest nonprofit restructurings of its kind in history,” according to the ACS 2013 Stewardship Report. The Stewardship Report describes that ultimately, the goal of the transformation is to allow ACS to deliver more efficiently and effectively on its mission to save lives. As part of the transformation, ACS offered 4,300 eligible employees incentive buyouts through a “voluntary separation program” in March 2013, which were accepted by about 330 employees and provided ACS with an estimated savings of about $20 million, based on a February 2015 article in The NonProfit Times.
The more than $7 million in total compensation paid to the six retiring ACS executives in 2013 comes just one year after ACS paid over $5 million in total compensation packages to five executives that retired during 2012, and about five years after ACS paid over $7 million in total compensation packages to five executives that retired during fiscal 2009, according to the ACS tax filings for the four-months ending December 31, 2012 and fiscal year ending August 31, 2009. That makes more than $19 million that ACS paid out during 2008-2013 to 16 retiring executives, based on ACS’s tax filings. ACS reported the years of service at the society for 11 of the retiring executives, and those 11 each received an average total compensation package of about $1.5 million upon his or her retirement after working at the society for about 33.5 years, on average. CharityWatch questions whether million dollar plus retirement payouts are necessary to retain ACS employees long-term since they already are rewarded with the opportunity to serve such an important cause.
The employee retirement benefits offered by ACS, according to the notes accompanying its 2013 audited financial statements, include: (1) a defined benefit pension plan that covers nearly all of its employees; (2) a defined contribution plan with a related matching amount by ACS, subject to a maximum; (3) a supplemental executive retirement plan (SERP) for higher income employees; and (4) a post-retirement benefit plan for assistance with post-retirement medical, dental, and life insurance coverage for certain employees hired prior to 1995. ACS expected to contribute approximately $45.2 million to all of its retirement plans in 2014, and its estimated future benefits payable related to its total retirement and post-retirement benefits accumulate to approximately $232.7 million for the five-year period from 2014-2018, according to ACS’s 2013 audit.
The top ten compensation packages for retiring executives that were paid out by ACS during 2008-2013 are summarized in the schedule below.